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French Connection records flat retail sales

French Connection saw like-for-like retail sales in the UK and Europe rise 0.3% over the 16 weeks ended November 24. However its wholesale division continued to struggle.

French Connection said sales within its UK and Europe retail division grew 0.6% in total and that womenswear continued to outperform its menswear ranges.

It added that its Toast fascia and the French Connection ecommerce business had also shown “encouraging” increases in revenue.

Wholesale in the UK and Europe, which accounts for 16% of group turnover, was down 11% for the period and gross margin for the wholesale business also continued to be affected by the strength of the US dollar. Forward orders for the Spring/Summer 2010 season are also below last year’s levels.

French Connection said that its retail operations in North America remained challenging. Like-for-like sales in the US were down 4.7% over the 16 week period.

As previously announced French Connection will shut its business in Japan by the end of February 2010, with the cost of closure expected to be less than £500,000.

At the end of October, French Connection had net cash of £15.4m, compared with £20m the year before. The reduction in cash was impacted by its trading results but it added that October was one of its low-points for the cash year and it would build cash reserves through the busier Christmas period.

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